Singapore Exchange in Exclusive Talks to Buy Baltic Exchange

SINGAPORE—Singapore's stock exchange, Singapore Exchange Ltd., said Wednesday that it has entered into exclusive talks to buy the Baltic Stock Exchange Ltd., a deal that could put the nearly 300-year-old London exchange under new ownership.

SGX said it and the Baltic Exchange would meet with Baltic Exchange shareholders over several weeks to explain and discuss the offer.

"The period of exclusivity will start from Wednesday and expire on June. 30," SGX said in a news release. But it emphasized that there was no certainty a deal would happen.

Baltic Exchange Ltd., a 272-year-old shipping marketplace credited with helping expand British trade during the country's imperial heyday, had attracted a handful of potential suitors interested in its globally traded shipping contracts and indexes. Apart from SGX, Platts, a division of S&P Global Inc., and CME Group Inc., the operator of the Chicago Mercantile Exchange, were among the parties interested, people familiar with the matter said earlier.

The Baltic exchange in February confirmed that it had received "a number of exploratory approaches and that it [was] in confidential discussions with selected third parties regarding its future strategy and ownership."

The Baltic exchange is tiny compared with some other exchanges considering mergers. Bids were expected to range between $100 million and $120 million, people familiar with the matter said. By comparison, London Stock Exchange Group PLC and Deutsche Bö rse AG are in talks to merge in a deal that could create a combined company with a value of about $30 billion.

In its statement Wednesday, SGX said the proposed transaction would bring together complementary strengths of Singapore and London, two of the world's most important maritime hubs.

SGX proposals include keeping the Baltic Exchange's headquarters in St. Mary Axe in London and maintaining existing market benchmark production and governance models.

Both SGX and the Baltic Exchange would also benefit from new growth opportunities, including potential new shipping benchmarks and clearing solutions that meet the market's evolving needs for data and trading, SGX said.

The deal would significantly boost the Singapore exchange's derivatives business and further advance its ambitions of becoming a global maritime financial center. It is also the first big acquisition attempt by Singapore Exchange since its unsuccessful, US$8 billion bid for Australian bourse operator ASX Ltd. in 2011.

Write to P.R. Venkat at [e-mail]

(END) Dow Jones Newswires

May 25, 2016 07:15 ET (11:15 GMT)

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